Jamie presents wrists, slaps readied

You remember JPMorgan Chase, the Too Big to Exist bank that picked up Washington Mutual during the great panic, growing larger still. The Wall Street Journalreports today that the Office of the Comptroller of the Currency will issue an order that “will ask the largest U.S. bank to remedy the breakdowns that allowed a small group of London-based traders to rack up more than $6 billion in losses last year.”

Gee, OK, Mister Regulator. The “London Whale” episode emerged last May, a result of gambling, not making loans or doing anything to support productive, job-creating enterprise. Indeed, the whale was betting derivatives that certain companies would fail; if they had, the House of Morgan stood to profit hundreds of millions of dollars. Since the scheme blew up, CEO Jamie Dimon has been as contrite as he can be, supposedly put in new “controls” and shuffled staff — and regulators have been notable for their lack of curiosity. One wonders if Dimon finally gave the Comptroller permission to issue this “order.”

And this is the strongest of the Too Big to Exist Banks. The best run. But every bank CEO learned from the bailout that they can essentially take any risk and Uncle Sam will bail them out.

Rolling Stone’s Matt Taibbi has laid out the crushing scandal of the bailout, which created a permanent bailout state and sucker class (you and me, dear reader). Fines of a few billions have been slaps on the wrist. No major criminal prosecution ensued. The Volcker Rule is stillborn. Now, just as before the bank-caused crash, regulators and political leaders are cowed. The banks recently got the easier regulation they wanted in the international Basel accords — too bad for us.

The big banks are more dangerous than ever. The next crisis is being loaded right now.